Benefits minister Malcolm Wicks said this week that, while the government wanted to press ahead with "radical reform of housing benefit", it was not yet at the decision-making stage.
No major reform to the benefits system would be introduced without being tested, he told delegates at a Chartered Institute of Housing benefits conference in Oxford this week.
It is understood that major changes to the benefits system already planned for next year have put paid to other reforms in the near future. The government is understood to want the working families tax credit, pension credit and child tax credit to bed in before introducing other changes.
Ministers have long favoured a "shopping incentive" for housing benefit. This would force tenants to contribute part of their rent out of their own pockets, cutting benefit costs and making them take responsibility for the cost of their housing.
Last year's Labour manifesto promised: "In the longer term, we will build on our restructuring of rents to ensure housing benefit strengthens work incentives."
Restructuring to allow tenants to make choices based on rents that reflect the value of the home was seen as a prerequisite for reform. But the 10-year plan has run into delays, concessions and confusion.
Ministers commissioned research into benefit reform with a view to implementing change as quickly as possible. But latest government thinking favours putting the issue on the back burner until after 2006.
Experts said it is unlikely the system will be rolled out across the country for some time if it is to work. York University professor Steve Wilcox, who worked on modelling incentive schemes for the former Department of Transport, Local Government and the Regions, predicted the idea would be introduced first in the private sector, five or six years from now.
He said: "I think shopping incentives in social housing will follow shortly after. The confusion on rent restructuring will hasten their introduction before the restructuring is completed."
London School of Economics professor of housing economics Christine Whitehead said any incentive was unlikely to come in before the next election. "The principle makes economic sense but it cannot work until people have real choices," she said.
Mechanisms had to be in place to ensure people had more choice in the private sector, she said.
Benefits software supplier Ferret Information Systems said the government was already wrestling with the biggest changes to benefits in a generation. Managing director Gareth Morgan added: "Every secretary of state looks at housing benefit changes, then decides it is too difficult. There is no low-cost solution."
The Department of Work and Pensions said shopping incentives were among the options under discussion, and no pilots had been decided on yet.
For the benefit of whom?
Some recent reform proposals include:- Frank Field’s controversial “two strikes and out” bill, which proposes withholding housing benefit from antisocial tenants
- “Shopping incentives” designed to scrap the current system of 100% housing benefit for many claimants
- Working families tax credit for families with dependent children on low-to-middle incomes, expected 2003
- Pension tax credit, set to be introduced in 2003
- Children’s tax credit to replace the married couples’ allowance, also expected next year
- Two government reviews of housing benefit have yet to prompt any radical changes to the system
Source
Housing Today
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